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4.1 General Principles
An advance for essential repairs should generally be confined to those essential for the preservation of the property. When processing an application for assistance in respect of repairs, the decision should be based on the borrower's description of repairs required and approximate cost. A technical inspection and report will not normally be requested. However, any charges for Consultants' inspections and associated costs incurred by the applicant in preparing details of the proposal may be included in the total amount of the advance sought.
One of the criteria specified in s.21 for the issue of certificates of entitlement for advances for essential repairs is that bearing the cost of keeping the home in good order and repair would cause serious financial hardship to the person- [please see Entitlement GO's Chapter 6].
Assistance to complete essential repairs is only available where the applicant has already received the maximum advance of $25,000. The interest rate on Advances for Essential Repairs is capped at 6.85%pa and variable at 1.5%pa below the Benchmark Rate while the Benchmark Rate is below 8.35%pa - the same provisions applicable to Additional Advances. The possibility of the applicant obtaining an Additional Advance for repairs without the restriction of having to satisfy the serious financial hardship criteria which apply to applications for Advances for Essential Repairs should be explored and the applicant advised accordingly. In some cases it may be that the applicant would be granted an Additional Advance for part of the repairs cost and the balance as an Advance for Essential Repairs. When explaining the options, it should be pointed out that the limit available for any further advance under the portability arrangements would include the amount of any additional advance that has been made to the person, but would exclude the amount of any advance for essential repairs.
Before repairs are undertaken the borrower should be counselled on the desirability in his/her own interest of minimising continuing charges by making his/her own arrangements for the completion of repairs which are not of a structural nature, perhaps with the assistance of relatives, or friends. He/she should also be advised of any assistance which might be available from reputable and active charitable organisations, such as Apex, Lions, TPI Association etc., in relation to repairs which will not be covered by the essential repairs advance. Other forms of home maintenance assistance, such as those provided by some State Governments might also be an option for the client's consideration.